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AMERICAS DATA CENTER COLOCATION MARKET SIZE TO REACH REVENUE OF USD 12 BILLION BY 2025, GROWING AT A CAGR OF 1.7% DURING THE FORECAST PERIOD.

Americas Data Center Colocation Market Size, Share, & Trends Analysis Report by Electrical Infrastructure (UPS Systems, Generators, Transfer Switches and Switchgears, Rack PDUs, and Others), Mechanical Infrastructure (Cooling Systems, Racks, Others, and Cooling Technique), General Construction (Building Development, Installation & Commissioning Services, Building Design, Physical Security, and DCIM), Service Type (Retail and Wholesale), and Geography (US, Canada, Brazil, and Other Latin America) Industry Analysis Report, Regional Outlook, Growth Rate, Trends, Competitive Landscape, Share & Forecast, 2020–2025

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Most Exhaustive Report

309 Pages

28 Tables

118 Charts

2 Regions

3 Countries

35 Companies

5 Market Segment

Americas Data Center Colocation Market Report Scope

Report Attribute Details
Market Size (Revenue) USD 12 BILLION (2025)
Market Size(Area) 3.8 MILLION SQUARE FEET(2025)
CAGR 1.7% (2020-2025)
Base Year 2019
Forecast Year 2020-2025
Market Segments Electrical Infrastructure (UPS Systems, Generators, Transfer Switches and Switchgears, Rack PDUs, and Others), Mechanical Infrastructure (Cooling Systems, Racks, Others, and Cooling Technique), General Construction (Building Development, Installation & Commissioning Services, Building Design, Physical Security, and DCIM), Service Type (Retail and Wholesale)
Geographic Analysis North America and Latin America
Countries Covered US, Canada, Brazil, and Other Latin America

INDUSTRY INSIGHTS

The Americas data center colocation market is dominated by the US, Canada, and Brazil, with the US contributing to around 83% of investments in 2019. Several factors are responsible for high growth of colocation services in the region which include the increased demand for cloud-based services and enterprise migration from on-premise data center to colocation facility in Latin America. The cost of colocation is higher in the US than other countries in the region. The data center colocation market was expected to grow at a CAGR of around 6%. However, the outbreak of the COVID-19 pandemic is likely to drive the market and likely increase the revenue of colocation providers by over 20% in 2020.

Colocation providers involved in the expansion of existing capacity will continue to drive market revenue during the forecast period. The market will also witness new providers to grow their revenue. The Americas data center colocation market witnessed significant M&A activities in 2019, due to the rise in demand from several businesses, leading to data center suppliers. This is likely to continue during the forecast period.  The enterprise investment in facilities will continue to decline because of the budget and time constraint in developing and operating data centers. This will, in turn, increase the demand for colocation services. Also, the availability of modular pre-fabricated data centers with the rack capacity of up to 20 will pose a major threat to the retail colocation business.

SNIPPETS

      • Around 150 colocation investments witnessed across Americas market in 2019, with the US dominating the market with investments in around 115 new data center and expansion projects.
      • In Latin America, the increase in digitalization initiatives by businesses will continue to grow the investment in colocation services.
      • BFSI, healthcare, IT services, transportation, and heavy industries are expected to emerge as major end-users for data center colocation services.  
      • California, Georgia, Illinois, Nevada, New York, Texas, and Virginia are the major locations for the development of colocation data centers.
      • The rack power density is expected to grow to an average 10−12 kW by 2025 from of 4−6 kW in 2019.The adoption of VRLA UPS batteries will continue to dominate the Americas data center colocation market with the market share for lithium-ion increasing significantly

      AMERICAS DATA CENTER COLOCATION MARKET SEGMENTATION 


      This research report includes a detailed segmentation by

      1. Electrical Infrastructure
      2. Mechanical Infrastructure
      3. General Construction
      4. Service Type
      5. Geography

      INSIGHTS BY ELECTRICIAL INFRASTRUCTURE 

      The adoption of 2N redundant UPS systems has been increasing among several data center facilities. Generators and cooling systems are deployed in N+1 redundant configuration. The procurement of renewable energy for data centers will reduce the demand for generator systems in the market. Most data centers will deploy over 1,000 kVA UPS systems and >2 MW generators, thereby driving the revenue growth of the Americas data center colocation market. Almost 95% of facilities will procure monitored, managed, and switched PDU solutions by 2025. The demand for generators and UPS systems constitutes the major revenue growth in the US market. With the rise in data center power outages and increased critical load, there is a high demand for redundancy in data centers.

      Due to the increased unreliability of power supply, the generators market will continue to grow across facilities in Latin America. The market will also witness the strong adoption of Diesel Rotary Uninterruptible Power Supply (DRUPS) technology as they combine both battery and flywheel UPS topology with a diesel generator to provide backup energy during power outages. VRLA batteries are commonly used in data centers, and they are the most popular batteries used in the market currently. However, the emergence of lithium-ion batteries is likely to affect the usage of VRLA batteries and is expected to contribute significant revenue to the Americas data center colocation market by the end of the forecast period 

      INSIGHTS BY MECHANICAL INFRASTRUCTURE   

      A majority of facilities in Americas are cooled through free cooling systems that facilitate over 4,000 hours per year. The deployment of tall racks of 45U - 52U is experiencing strong adoption in the market. Data center vendors in South-Eastern and Western US are adopting air- and water-cooled chillers with the economizer mode to facilitate partial cooling of the facility using outside air. The redundancy adopted is N+1 or N+N in the cooling segment across the US.  In terms of cooling techniques, facilities built-in 2019 adopted free cooling techniques to reduce the cooling energy cost. Economizers, evaporative and adiabatic coolers, and free cooling chillers are adopted among data centers during summer and winter conditions. Also, the adoption of direct liquid cooling and liquid immersion cooling solutions is growing among data center operators that are built to support a rack power density of over 20 kW.  Most data centers are being designed based on the American Society of Heating, Refrigeration, and Air-conditioning Engineers (ASHRAE) guidelines.

      In Latin America, several facilities are adopting systems that support a combination of free cooling systems in data centers for most of the year. This enables data centers to reduce a considerable amount of energy consumption, leading to the operation of a facility at a PUE of less than 1.6. The average PUE of facilities is reducing YOY and it is likely to reduce to around 1.4 during the forecast period. The data center market in Chile comprises data centers that operate with evaporative coolers and CRAC units. The rest of the Latin American market adopts both chilled water systems and air-based cooling systems. 

      INSIGHTS BY GENERAL CONSTRUCTION

      The North America market has a strong presence of general contractors and a strong sub-contractor base. The competition among general contractors will increase over the next few years. Expertise in developing data centers within a short span of time i.e., less than one year, will be a key criterion for data center operators in the selection of general contractors.

      Due to the increased investments in mega data center projects in the US market, there is a high requirement for construction contractors in the country. Moreover, infrastructure vendors are increasingly partnering with major contractors to increase their revenue share in the industry. Tax incentives and the availability of free cooling solutions are some of the other factors that are included while selecting a site for data center facilities. In the US, most states provide tax incentives for data centers; also, they provide sales and property tax and job-based tax incentives.

      In Latin America, Constuctora Sudamericana, ZFB Group, AECOM, and Aceco TI are some of the prominent construction contractors, engineering, and architecture firms. Also, the presence of modular data center developers such as Etix Everywhere and Huawei has helped the growth of modular data center buildouts or procurement in the last two years. Latin America is experiencing strong growth in greenfield construction. This will bring significant revenue opportunities for contractors and subcontractors operating in the market.

      INSIGHTS BY SERVICE TYPE

      The retail colocation market is likely to be driven by the increased demand for colocation services from organizations in developing countries especially in Latin America. Several existing retail colocation service users are expected to opt for wholesale colocation capacities during the forecast period. As cloud-based service providers colocate wholesale spaces across the region, customers are likely to consider cloud-based solutions as their data will be stored locally or in close proximity to their country of operation. Overall, the retail colocation segment is expected to lose market share to the wholesale colocation segment.

      The adoption of wholesale colocation services is growing across the region due to the increased demand for computing capacity from global enterprises, cloud providers, big data and IoT organizations. Factors such as high bandwidth, minimum power capacity, and capability to expand the space of data center are increasing the demand for wholesale colocation. The increasing demand for wholesale colocation services is likely to lead to the development of multiple mega and hyperscale data center projects across the region during the forecast period. 

      INSIGHTS BY GEOGRAPHY

      The US is the largest market for colocation in the world, contributing to around 40% share in revenue in 2019. In terms of colocation service revenue, the US market is expected to reach a revenue of over 20 billion by 2025. In terms of investments, the increased power consumption and carbon emission levels have prompted data centers to install energy-efficient infrastructure and procure renewable energy sources for their facilities. The investment is expected to grow steadily in the US during the forecast period as cities such as Chicago, Dallas, Atlanta, Ashburn, Los Angeles, and Phoenix have taken initiatives toward developing smart cities with multiple connected devices and edge data centers.  The US hosts around 1,300 colocation facilities. Virginia is the highly sought-after location for colocation in the US. Texas, Arizona, Illinois, North Carolina, California, New York, and Florida are some of the major locations for the colocation data centers in the US.

      INSIGHTS BY VENDORS

      In the Americas, Digital Realty is the largest colocation provider with a revenue share of around 12%. In 2019, Digital Realty operated around 120 data center facilities. In North America, Digital Realty will continue to invest in millions of square feet throughout the forecast period, aiding in strong growth of its revenue by over 10% YOY. Digital Realty is followed by Equinix with a revenue share of close to 11%. As of 2019, Equinix operated about 86 facilities in Americas, with total cabinet capacity of around 110,900. CyrusOne is the third largest revenue contributor to the Americas data center colocation market. The company operates over 40 data centers in the US. It also entered Latin America by investing around $12 million in ODATA. Apart from these providers, Flexential, Switch, QTS Data Centers, NTT Global Data Centers, CoreSite, Cyxtera, and TierPoint are among the major contributors to colocation services market in Americas.

      The Americas data center colocation market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:

      By Electrical Infrastructure  


      • UPS Systems
      • Generators
      • Transfer Switches & Switchgears
      • PDUs
      • Other Electrical Infrastructure

      By Mechanical Infrastructure

      • Cooling Systems
        • CRAC & CRAH Units
        • Chiller Units
        • Cooling Towers & Dry Coolers
        • Economizers & Evaporative Coolers
        • Other Units
      • Racks
      • Other Mechanical Infrastructure

      By General Construction 

      • Building Development
      • Installation & Commissioning Services
      • Building Designs
      • Physical Security
      • DCIM/BMS

      By Service Type

      • Retail
      • Wholesale

      By Geography

      • US
      • Canada
      • Brazil
      • Other Latin America

      Frequently Asked Questions

      Americas data center colocation market size to reach revenue of over $12 billion by 2025, growing at a CAGR of approx. 1.7% during the forecast period.
      Yes. The report forecast market investment by Area (Million Square Feet), Power Capacity (MW) and also provides data by service type(retail/whoesale)
      The outbreak of the COVID-19 pandemic is likely to drive the market and likely increase the revenue of service providers by over 20% in 2020.
      The following factors are likely to contribute to the growth of the Americas data center colocation market during the forecast period: • Increased Renewable Energy Adoption Among Colocation Providers • M&A Activities to Improve Colocation Market Share • Growth in Rack Power Density • Increasing Demand for Edge Data Centers
      Archer Data Center, EdgeCore Internet Real Estate, Prime Data Centers , GIGA Data Centers, Pegasus Group Holdings, PointOne, Stack Infrastructure , Novva, Scala Data Centers are the new entrants in the market.
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